2018 (11) TMI 906 - AT - Central Excise

Delay in payment of excise duty - invocation of Rule 8 (3A) of Central Excise Rules, 2002 - confiscation of goods so removed under Rule 25(1)(a) of the Central Excise Rules, 2002 - case of appellant is that that Rule 8(3A) has already been read down by the Hon ble High Court of Gujarat and hence the demand is not sustainable - Held that - The judgment of the Hon ble High Court in the case of Indsur Global Ltd. has been appealed against and has been stayed by the Hon ble Apex Court as reported at 2014 (11) TMI 1101 - SUPREME COURT - The stay granted by the Hon ble Apex Court leaves me with no option was to hold that the ratio of the judgment of the Hon ble High Court does not apply. Considering the overall facts, the quantum pf penalty is reduced - appeal allowed in part.

Summary

Issues:
Violation of Rule 8(3A) of the Central Excise Rules, 2002 leading to the imposition of penalty.

Analysis:
The case involved a dispute over the imposition of a penalty under Rule 25 for violating Rule 8(3A) of the Central Excise Rules, 2002. The appellant, a manufacturer of various paper products, faced penalties for delayed payment of excise duty in March and April 2013. The lower authority imposed a penalty of &8377; 50,000 for contravening Rule 8(3A) read with other relevant rules. The appellant challenged this penalty before the First Appellate Authority, which upheld the decision.

The appellant argued that Rule 8(3A) had been interpreted differently by the Hon'ble High Court of Gujarat in a specific case, and this interpretation had been followed in subsequent judgments, including those by CESTAT Hyderabad and other High Courts. The appellant contended that the penalty should be set aside based on this interpretation. However, the Departmental Representative highlighted that the High Court judgment had been appealed and stayed by the Supreme Court, rendering the previous interpretation inapplicable. The Departmental Representative also pointed out that this stay was not considered in previous cases where the High Court's judgment was relied upon.

After considering both arguments and the records, the Member (Technical) noted that the violation of Rule 8(3A) was established, making the appellant liable for penalties under Rule 25. Despite the stay on the High Court judgment, the Member found it fair to reduce the penalty from &8377; 50,000 to &8377; 25,000 considering the overall circumstances of the case. The impugned order was modified accordingly, reducing the penalty imposed on the appellant. The appeal was disposed of with the modified penalty amount.

In conclusion, the judgment addressed the issue of penalty imposition for violating Rule 8(3A) of the Central Excise Rules, 2002, considering conflicting interpretations by different courts and the subsequent stay by the Supreme Court, ultimately leading to a reduction in the penalty amount for the appellant.